Transport business plan

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Transport Business Plan

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2.    Industry Analysis
2.1    Industry Overview

The business forms part of the public transportation industry of The Republic of Zambia. In the past, the public transportation industry was mainly dominated by the government. The provision of public transport services was dominated by government owned trains as well as bus transportation entities that were occasionally granted subsidies by the government. The demand for public transportation was to a large extent attributed to the Zambian community as most of them could not afford to own private motor vehicles.

In recent times, mini-bus taxis and luxury buses have become the main mode of public transportation for people without motor vehicles in Zambia and provide transport to 5 – 10 million people on a daily basis. Mini-bus and luxury bus transportation constitutes an estimated 65% of all passenger journeys.  There has also been growing usage of trains, airplanes and tour buses in Zambia. 

The future of the public transportation industry faces numerous challenges which pose considerable reservations about its sustainability. The challenges are mainly attributed to poor road safety, low financial margins, pertinent skills deficiencies at operator and institutional level. All these challenges are being addressed by the Government and other stakeholders. Stakeholders have high expectations about the public transportation industry.

2.2    Industry Size

There are an estimated 7.9 million public transport commuters in Zambia. Approximately 5 million taxi and luxury bus commuters account for over 63 percent of public transport work trips. The other portions are represented by air travel services (22%) and approximately 15% by trains.   

2.3    Growth Rate and Growth Potential

While there are a number of challenges facing the public transportation industry, there is potential for growth over the forth coming years. This is attributed to the growing demand for public transportation services.

2.4    Players In The Industry

The players in the public transport industry include the following:

  • Mini-bus and luxury buses: these are very vivid players in the industry and provide transport to the general public.  They form part of the formal public transport system in Zambia.

  • Railways/ train operators: these players play a major role in transporting both the general public and goods. They make use of designated routes and are ideal for long distance journeys. High capital costs as well as operating costs are involved. New entrants are ‘barred’ due to the regulatory environment surrounding railway businesses.

  • Airways: airlines mainly attract medium to high income earners from the business world and wider general public. They offer convenience in terms of speed for their users. High capital and operating costs are involved and as a result there are few players in this faction of the transport industry.

2.5    Key Success Factors

The main key success factors in the public transportation industry are as follows:
Customer focus: being customer focused and market driven is a key success factor in the public transportation arena. It is imperative for entities to focus on the needs and preferences of customers prior to offering any solutions. Meeting their expectations is a key to success:

  • Focusing on niche markets: focusing on untapped markets is a key success factor

  • Safety: the safety of passengers cannot be compromised. Taking the safety of customers into consideration is crucial to succeeding in the industry. Essentially, having skilled, competent and experienced drivers will contribute lucratively to the sustainability and success of a transportation entity

  • Affordable pricing: the users of transportation services value transport providers that are affordable. While affordable pricing is important, the safety of commuters must not be compromised

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